I'm the founder of Prisonology.com, which is a web-based product to help defendants prepare for prison. I hope you never need it! I write on white-collar crime and try to provide a different perspective than that of the mainstream media. I co-authored "Stolen Without A Gun" with Neil Weinberg, former Executive Editor Forbes Magazine (now a Reporter for Bloomberg). On a good day, I'll be talking with some bright defense lawyers or writing for Forbes.

Fmr KPMG Partner Scott London Shares Cautionary Tale Before Prison

At 51 years old, Scott London should be at the top of his professional career as the audit partner at the Los Angeles office of Big 4 accounting firm KPMG. Instead, on July 18 he will begin serving a 14-month federal prison sentence after pleading guilty last year to passing inside information from companies he once audited (including Skechers and HerbalifeHerbalife). The tips went to his friend Bryan Shaw who then traded stocks based on the confidential information. Shaw’s trading patterns later caught the attention of authorities and was approached by the FBI. Shaw was scared and soon agreed to record conversations with London in return for leniency. Before he goes away, London is sharing his story with certified public accountants (CPAs) as part of a continuing education program with Gary Zeune.

Zeune, who has conducted training classes for CPAs for over 27 years, has interviewed numerous convicted felons, encouraging them to share their stories as part of training professionals. In London’s case, Zeune is going to interview the former KPMG partner as part of a live 4-hour ethics training class on June 25 promoted as, “… hard hitting, no holds barred, one-of-a-kind live interview.” For those interested in participating, following are the links for the Live and Recorded training sessions:

I asked Zeune how former professionals who have fallen from grace are received and he told me, “At first the audience has their arms crossed believing they have nothing to learn, then they slowly start to engage in the presentation, then by the end their jaws drop thinking, ‘That could have been me.’”

Scott London

All accounting firms who audit publicly traded companies take their responsibility for being the gate keepers to capital markets very seriously. At annual training events, firms have their partners and employees attest that they abide by all the rules concerning confidentiality and protection of client information required by the American Institute of CPAs (AICPA). In an interview, I asked London how he reconciled his actions of sharing client information while simultaneously violating the same rules that he was attesting to be following? His answer, “To be honest, I can’t. I knew the rules and followed them for 26 years. I take full responsibility for what I did, but I am at a loss to say exactly why I allowed myself to break my moral and ethical code. I supposed it comes down to other factors in my life,” London said. “Between the long tenure of being in the same position in my firm for possibly too long and the desire to help out a friend, those factors may have lead to an impairment of judgment on my part. It is no excuse for sure, but people ask ‘why?’ and I do my best to answer.”

Not only was London trained on confidentiality, but he assured the training of those who worked for him, “Because of my role as partner and in the leadership of the firm, it made it much worse,” London said, “A point that U.S. District Judge George H Wu highlighted during his sentencing of me.”

So why is London speaking out when he could just go quietly away to prison? “The profession has given a lot to me over the years,” London said of the upcoming training class. “This opportunity was a way for me to give back to the profession, and, hopefully, prevent someone from making the same mistake. If provided a forum to highlight the ethical behavior and the potential damage to family, net worth and others who are innocent in the entire process, hopefully I can prevent others from doing what I did.”

On a personal note, I asked London what life has been like for the past year … it has not been pleasant:

“Worse than I could have ever imagined, which is the message I want to deliver to others in this class. The consequences to me were tough, but manageable. Dealing with the onslaught of media and the embarrassment of the arrest were the toughest battle of my life. The really hard part was damage to those innocent of my actions; my family, my employer and friends. My family has all been impacted in different ways, but their lives all changed. They are all fine and doing quite well, but things are different for them and they need to do things differently as a result. I think about my employer and the angst I caused them as well as the clients involved. It goes without saying, but I never intended any harm. My friends have also been great, they all have been supportive. Probably the most difficult was the loss of friends and colleagues at my former employer. Aside from the chance meetings in restaurants and such, I have not seen or heard from any of them. I worked there for nearly 30 years and there are some long time relationships that are no longer. That part hurts, but I am moving forward.”

Zeune will conduct the interview live on June 25 and, if you cannot make that presentation, it will be replayed June 27-30.

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